Extending the transactional view on public-private partnership projects: Role of relational and motivational aspects in goal alignment

In public-private partnerships (PPPs), aligning the goals of the public sector with those of the private contractor is usually achieved using incentives informed by agency theory. However, the success of the traditional PPP model has been contested, and recently PPPs have started focusing more on collaboration and investment sharing. So far, this development in practice has barely been reflected in the research. This paper seeks to widen the theoretical lenses on PPPs by developing a theoretical framework integrating agency theory, social capital theory, and self-determination theory. The aim is to allow for a better understanding of incentives for goal alignment by including motivational and relational aspects in addition to the transactional view. A multiple case study comprising four Norwegian PPP projects was conducted to empirically apply and further develop the framework. The findings suggest several benefits of social and psychological mechanisms to goal alignment in PPPs, including trust, reciprocity, and intrinsic motivation. Early involvement of contractors combined with risk sharing and relationship building are important factors to this end.